{"id":27893,"title":"The K shaped Recovery \u2013 This time is different. Are policy-makers ready for it?","link":"https:\/\/bst-europe.eu\/de\/globalization\/the-k-shaped-recovery-this-time-is-different-are-policy-makers-ready-for-it\/","date":"11. M\u00e4rz 2021","date_unix":1615467336,"date_modified_unix":1633439360,"date_iso":"2021-03-11T12:55:36+00:00","content":"

In Europe and the US, the economy<\/strong> slumped massively across all sectors in March and April 2020. After that, a rapid recovery set in, suggesting a v-shaped economic cycle.<\/p>\n

K shaped recovery<\/strong><\/a>: There was another economic slump with the onset of a second wave of infection starting in October 2020. This time, however, it hit different sectors with varying degrees of severity. Using Germany<\/strong> as an example, we describe the resulting K shaped recovery<\/strong>.<\/p>\n

The service sector in the corona crisis – this time, it’s different
\n<\/strong><\/h2>\n

In previous major economic crises, the service sector came through the economic downturn relatively unhurt. This was also true in the financial and economic crisis of 2008\/09. However, with the Corona pandemic outbreak in spring 2020, parts of the service sector<\/strong> also collapsed.<\/p>\n

The hospitality<\/strong> sector exemplifies this in Germany<\/strong> \u2013 a sector that includes a wide range of businesses and goes from hotels and restaurants to dance clubs and bars and caterers and campsites. The restrictions on public life are hitting this sector with full force.<\/p>\n

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k shaped recovery<\/figcaption><\/figure>\n

Real, or inflation-adjusted, sales in the hospitality industry<\/strong> were about 75 percent lower in April 2020 than in April 2019. From May through August 2020, sales began a sharp increase. November and December (more recent data is not available) saw another massive drop in sales.<\/p>\n

Monthly real turnover in the hospitality sector in Germany since 2005, calendar- and seasonally adjusted, data as index value (2015 = 100).<\/p>\n

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k shaped recovery<\/figcaption><\/figure>\n

Source: Federal Statistical Office (Destatis), data downloaded on February 20, 2021.<\/p>\n

K shaped recovery in Germany<\/strong><\/h2>\n

In the manufacturing sector<\/strong>, the second lockdown in Germany – in contrast to the first -has not yet led to a decline in sales. On the contrary, sales still increased slightly in the final months of 2020. With a little imagination, the composite course of these two sectors is similar to a K.<\/p>\n

Monthly real turnover in the manufacturing<\/strong> and hospitality sector in Germany since 2019, calendar- and seasonally adjusted, data as index value (2015 = 100).<\/p>\n

Source: Federal Statistical Office (Destatis), data downloaded on February 20, 2021.<\/p>\n

Manufacturing industry versus service sector<\/strong><\/h2>\n

Why do these different sectoral developments exist? The answer to this question is largely related to the specific characteristics<\/strong> of services. For many services, the time and place of production are identical to the time and place of consumption.<\/p>\n

A haircut can only be performed when the customer is on site. The same applies to concert visits, hotel stays, commercial parties, and much more.<\/p>\n

On the other hand, in the case of physical goods, production and consumption diverge – both in terms of time and space. This has three major consequences:<\/p>\n